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Interview, Part 1: Dan Leese, President And CEO, Hotaling & Co.

December 3, 2020

San Francisco-based spirits importer, marketer, and producer Hotaling & Co. was founded in 1993 as an offshoot of Anchor Brewing Co. In 2017, the brewing side was sold to Sapporo for $85 million, and Hotaling became a stand-alone spirits play.

This year Hotaling has been bolstering the portfolio, taking on the single malt Scotch brands of International Beverage Holdings (IBHL), which include Old Pulteney, Balblair, Speyburn, and AnCnoc. It also won import rights to The Arran single malt Scotch as well as Irish whiskies Writers’ Tears and The Irishman (owned by Walsh Whiskey Co.), while reviving the historic Hirsch Bourbon brand.

Other key labels in the portfolio include own brands Old Potrero whiskey and Junipero gin, as well as the Nikka range of Japanese whiskies, Hine Cognac, and the Luxardo line. SND editorial director David Fleming recently caught up with Hotaling president and CEO Dan Leese for an update on progress.

SND: When the brewing side was sold in 2017, the plan was to relocate your distilling operations from the Anchor brewery in Potrero Hill to a new location. How’s progress there?

Leese: Our original idea was to open a new distillery with a hospitality center, bar, tasting rooms, and tours. With all the uncertainty surrounding the pandemic, we canceled that plan. But our lease with Sapporo ends in December, and we will be moving. In 2018, we acquired a distillery at Pier 50 in San Francisco—originally the home of 209 Gin. It’s now called the Hotaling & Co. Distillery, and it will allow us to continue production uninterrupted.

SND: How important is the distilling side to the company?

Leese: Distilling comprises a small percentage of our business, but it remains important, and we’re investing. We’ve been producing at about 50% capacity at the (Potrero Hill) distillery, where we make the American craft gin Junipero and our artisanal rye Old Potrero. At Pier 50, we’ve increased our gin capacity five-fold. Total capacity for whiskey production has yet to be determined, as we’re still in the permitting process with the San Francisco Port Authority. We’ve slated some new initiatives for next year, like the expansion of our single barrel offerings. We also plan to fill some portfolio gaps and target emerging categories. Overall, we have three innovations in development that will likely be produced at the new Hotaling Distilling Co.

SND: Hotaling has made some interesting pickups lately, notably with the IBHL single malt brands Old Pulteney, Balblair, Speyburn, and AnCnoc. You’ve also got The Arran single malt, and The Irishman and Writers’ Tears Irish whiskies, and some others. How are those additions impacting things?

Leese: They’ve helped us strengthen relationships with our wholesalers, and we’ve bolstered our sales organization accordingly, adding three new chain retail positions. The IBHL brands are seeing strong demand—notably with Speyburn 10-year-old and Old Pulteney 12-year-old. The big markets of California, Texas, Florida, New York, and Illinois are important, and we’re getting good performances in control states, particularly New Hampshire and Virginia. Speyburn has a solid presence in off-premise chains and independent accounts. Old Pulteney has been repackaged, and we’re focused on distribution of the 12- and 15-year-old as well as Huddart, its non-age statement expression matured in ex-peated whisky casks. On the Walsh Whiskey brands, we’re seeing success with Writers’ Tears in national accounts as customers trade up from more traditional Irish whiskey labels.

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